India's Weak Patent Rights Hurt U.S. Trade Relationship

July 1, 2014

India's lack of intellectual property right enforcement strains the pharmaceutical trade relationship between India and the United States, explains Research Associate Clinton Ritchey in a new report from the National Center for Policy Analysis.

Over the past two years, the Indian government has engaged in a series of policy, regulatory and legal decisions that undermine internationally recognized intellectual property rights. U.S. pharmaceutical companies have had issues keeping their patents protected in India. For example:

India issued a compulsory license for the cancer drug Nexavar. The license waived Nexavar's patent protection and allowed a domestic Indian pharmaceutical company to create a generic version and sell it at nearly one-thirtieth the cost.

The Indian Patent Office rejected a patent application for an upgraded version of Gleevec, a leukemia cancer drug, stating it was not a significant improvement to the older version. Gleevec's latest version has been approved in more than 40 countries.

Indian generic drug companies opposed granting a patent for Sutent, a late-stage kidney cancer drug developed by Pfizer, claiming there was no originality in its invention. Sutent's patent has been approved in over 90 countries.

Without the certainty of patent rights, drug companies have little incentive to research and develop new drugs because the financial reward is limited. Patents ensure that companies will earn back the money they invest in the development of new drugs.

The United States hopes to influence India to reform their intellectual property practices without resorting to trade sanctions or restrictions.